Posted
by
timothy
on Wednesday July 29, 2009 @02:14PM
from the and-they're-not-virtual-like-transmeta dept.

Vigile writes "Since the company was spun off in March, GlobalFoundries has struggled to answer how it will survive and compete against powers like TSMC and UMC in the global world of chip manufacturing. Part of that answer came today when they announced the company's first customer, excluding AMD. STMicroelectronics will be using GlobalFoundries' 40nm lower power process technology for future cell phone SoC designs in the second half of 2010. While one customer won't drive enough revenue to make the foundry completely independent, it is an important step in the right direction and could lead to other customers finally making the leap."

You got a bunch of numbers screwed up. Most of AMD's current desktop and server CPUs are 45 nm (Phenom II, Athlon II, Opteron >2360/8360), while the laptop CPUs are 65 nm and will be going to 45 nm in a couple of months. AMD's GPUs are mostly 55 nm (Radeon HD 3xxx and 4xxx, except the HD 4770) with one 40 nm unit (HD 4770.) Most of Intel's CPUs are 45 nm, but all of the Celerons and some Pentium Dual Core and Core 2 Duo units are still 65 nm. Intel is going to the 32 nm process, but nothing 32 nm from them is going to ship for some time.

It is true that AMD still sells a lot of 65 nm parts (such as all of their notebook chips), but so does Intel. The comment about Intel being ahead of AMD in process technology is a moot point now that AMD proper is a fabless company. They spun off their fabs to GlobalFoundries and are free to use GF or any other foundry to make their processors, such as how they had Chartered Semiconductor to make some of their chips for them in the past. Thus the process technology Intel has means little for AMD unless the

40nm is currently the smallest process available. It is a half-step between 45nm and 32nm, and TSMC (the world's largest independent foundry) is currently ramping-up production at this node. Global Foundries was previously using 45nm SOI to supply AMD, but in-order to attract customers, they've added the 40nm half-step using bulk silicon (to match TSMC).

SOI is a no-go for most small companies making chips because the SOI wafers are more expensive to make, AND you have to redesign th

To free AMD up to outsource to other foundries, to allow GlobalFoundries to take on outside customers, to prevent losses in one area from affecting total company health, to allow outside investment in either company where the investor would not be interested in the other area of business...

It might, aside from who knows what kind of accounting sleight of hand, have the much more concrete value of increasing utilization of the fabs.

If you want to keep fabs competitive in process technology, they'll be incredibly expensive to build. Every moment that you aren't fabbing chips, you are losing money on that investment. If AMD can't keep their fab utilization up, they'll die(no pun intended). Spinning the fabs off and taking third party orders is, presumably, one way to do that, even if they can

After years of buying nearly 100% AMD, I've decided to throw in the towel. See, I've bought ATI video cards for years because of their good prices and good driver support. (Catalyst) But that's changed, now. As of Linux Kernel 2.6.30, support for "older" cards (including my not-quite 3-year-old laptop with its mobile X14 video card) has been cancelled.

Fedora Core 10 is the last supported distro that will run on my laptop with good support for 3D. I can't say just how much this pisses me off. I can see drop

So what was the point in spinning off a foundry into a separate company?

Funding. Someone was willing to go in with the big bucks in a foundry company, which would be much harder to do inside AMD as a single company. The graphics division of AMD is doing very well though, even though they're getting whipped by Intel on CPUs. Of course the prices to the end users are competitive but the margins aren't since AMD is completely boxed in to value segments. And they have no competitor on the netbook/nettop wave, it's Intel, Intel and more Intel.

So what was the point in spinning off a foundry into a separate company?

(Same reason any company ever spawns other companies: To create positions for more CXOs and fuck around with the accounting books. AMD isn't doing well, even though I wish it were.)

I know being cynical sounds good "Just more fat cats lining their own pockets, heh", but there are legitimate reasons to restructure companies.

In this case, foundries keep getting more expensive and AMD won't be able to compete with Intel if it keeps manufacturing in house. If it spins them off (while still retaining ~ 30% of the stock in the new company) they can achieve economies of scale by fabbing chips for other companies. This means that AMD will have a better shot at competing since they will no lo

You stated the real reason.FABs were expensive. AMD couldn't compete.Now AMD will be getting a special rate at that FAB, so it can compete with Intel, and the shitty finances will transfer over to the FAB company.

The FAB company will be able to get away with huge losses and debt for a year or two since they're a "new company looking to establish themselves" and other such bullshit. They're wearing a new face in order to try to get new investors.

... it seems whenever a chipmaker tries to fab its own parts (3dfx and their own boards when they merged/bought out STB) they end up dying a slow death. The only really that can afford it's own fab is intel and thats because it has the largest marketshare as well as having had leading products for so long.

Having its own fabs is also one reason Intel is successful. And outsourcing manufacturing was one reason for the decline of companies like TI and Motorola in the digital IC part of their businesses. Yes getting started in fabrication or any industry is really tough. But running your own fabs, once established successfully, is really valuable in my view. It makes the productive coordination between process, design, and product engineering so much easier.

But fabs are incredibly expensive. Fab 1 in Dresden has cost something like $6 billion dollars to date, from construction to current upgrades. Plus, you have to account for research and development costs of moving to smaller manufacturing sizes, which according to Intel was something like $600 million to $900 million to move from 45nm to 32nm. For a company like AMD that still has a lot of debt from the purchase of ATI, that's a lot of money. Add to that that the New York fab is estimated to cost $4.2 billi

To me this story is a prime example of a tidbit which is worth reading, but doesn't have enough meat on the bones to be a full-blown Slashdot story. Nothing wrong with that -- it just can't generate much interesting discussion. [And I tried moderating, there's just not much anyone can say but "hmmph.".]

I think Slashdot should have a separate div on the page for tidbits like this. Not that this is the best forum for feedback, consider it a prayer flag in the wind.